Finding (and Acquiring) Quality Used Cars in Today’s Market
- Your customer database is a treasure trove of untapped inventory potential.
- Predictive analytics can help identify your customer’s needs.
People are willing to travel farther and farther outside of their local area to find the right car—so how can you find the right inventory that brings those shoppers to you? In today’s market, your dealership’s ability to acquire quality used cars is the difference between getting ahead of the competition and sending your customers right to them.
We know that gathering a decent-sized inventory right now can be a tough endeavor, especially because demand is still outpacing supply. The good news is we’re here to offer you some insight into where those quality cars may be hiding (and how you can acquire them).
Unlocking The Missing Component
Dealerships often source cars from a variety of places—auctions, rental companies, previously lease vehicles, and trade in deals just to name a few. That said, there is one source that many often look past—your own customer database.
To show you what we mean, let’s use an example:
Gerry comes into your service lane for some routine maintenance. Not only is his car in great condition, but Gerry’s customer record in your DMS shows that he purchased his vehicle new from you about three years ago. (Sounds great so far right?)
Now you look at Gerry’s monthly payment and discover he’s paying $50 more each month than he would be paying if he got a new car. Based on all of this information—Gerry’s purchase history, the condition of his car, and his monthly payment—your sales team has everything they need to approach Gerry with a compelling reason to trade in his current vehicle for a newer model.
In other words, your customer database is a treasure trove of untapped potential when it comes to acquiring quality inventory.
When a Good Thing Gets Even Better
For as useful as your customer database is on its own, it’s even better for acquiring quality used car inventory when your dealership utilizes predictive analytics.
What is predictive analytics exactly? Put simply, predictive analytics is the use of past data to identify the likely outcome of a future event. For your dealership, this means finding the customers that have a high likelihood of purchasing a new car (based on the customer’s their past actions, their current situation, and the decisions of similar individuals). This data ultimately allows you to gain a better understanding of which types of campaigns, deal proposals, and possible up-sells they’re likely to respond to. Most importantly, it helps identify your customer’s needs.
Let’s run through another scenario:
Charlotte purchased a car from your dealership right before she went off to college. Since then, she’s returned to your service lane for routine maintenance a few times during her breaks from school.
Charlotte’s car is now about 5 years old and still running smoothly, but predictive analytics indicate that (with the right offer) Charlotte has a high-likelihood of purchasing something else. You see, Charlotte’s compact car is great for crowded campus driving, but her needs have changed a lot since then. She’s graduated now and has a job with a long, highway commute. With that extra time spent in her car, Charlotte might be interested in something a bit larger with additional comfort features.
This sort of framework makes it easy for your team to bring Charlotte in to look at your current selection of sedans. You can send her a personalized mailer inviting her to get her vehicle appraised, or maybe even show her how (for a comparable monthly payment) she could get into a nicer, newer car today—one that better suits her current lifestyle.
Quick Tip: It’s important to note that predictive analytics can’t ever guarantee that a customer will be in the market to buy—just that they have a high likelihood of purchase based on previous data. That said, it’s a useful tool for capturing additional service work as well. Your dealership can send reminders for routine maintenance at the recommended intervals for a customer’s specific vehicle (cool, right?).
Making the Most of Your Data
In addition to utilizing equity mining tools and predictive analytics to find the customers who are most likely to trade in for a newer car, your dealership can also utilize its database to create a network that brings valuable inventory right to you.
You likely have a network of auctions and rental companies that you regularly source inventory from—why not include your dealership personnel or even your customers in that network?
Don’t worry we have an example for this too:
Patty is a regular in your dealership’s service lane. (She even follows your dealership on social media to take advantage of the occasional service promotion.) While Patty isn’t personally interested in a new vehicle, she knows that her friend, Chad, has been in the market for a new car the past few weeks.
Let’s say your dealership decides to try incorporating a referral program—when a customer recommends your dealership to someone they know, both parties receive an incentive (a discounted service, a gift card, or even just some really cool merch).
When your dealership makes a post about the new referral program, Patty is immediately reminded of Chad. She sends him the post, and as a result, Chad looks through your dealership’s inventory listings and finds an SUV that he likes. After a test drive and a shout out to Patty, he happily leaves your dealership with a new car and a voucher for a free oil change.
Not only did your dealership make a profitable sale, but you boosted Patty’s loyalty to your service lane and received a valuable addition to you inventory (it’s a win-win-win really).
Getting a decent-sized used car inventory can seem like a daunting task, but there are tools out there to help make that process a little easier. Utilizing your customer database, predictive analytics, and offering personal incentives are great methods to help your dealership find those hidden gems that make customers—both old and new—chose you over the competition.